Reverse mortgages are seen as a way for seniors to tap into their current homes as a source of income. By drawing from the equity they already have, they can pay off bills, make improvements to their current residence in Myersville Maryland 21773, or even take a well-earned vacation. There is one option that most do not even consider: using a reverse mortgage for the purchase of a newer property.
Understanding a Home Equity Conversion Mortgage
In order to see how using a reverse mortgage for purchase of a newer property works, you first must understand the Home Equity Conversion Mortgage (HECM). The HECM is still relatively new, but it provides a way for those who are 62 years or older to borrow against the value of the home. With approval, the borrower gains access to funds without having to make monthly payments. Repayment of the loan does not occur until the borrower either passes away or sells the property.
This loan is not an option for everyone. In fact, the guidelines stipulate a minimum age of 62 years old. The borrower must also either own their home outright or have a large amount of equity built up in Myersville Maryland 21773.
Using Reverse Mortgage for Purchase
For some older Americans, the idea of living closer to family members is ideal, but they do not necessarily want to give up their existing home. If this is the case, they may apply for a reverse mortgage. The borrower must occupy this second home for a set portion of the calendar, and the original residence, which the loan is against, must be the borrower’s primary residence in Myersville Maryland 21773
When using a reverse mortgage for purchase, there are some limitations. For example, this type of loan only covers 47 to 52 percent of the purchase price. It is the borrower’s responsibility to make up the difference. This money can come from a retirement account, savings, or a gift. The actual amount borrowed depends on the age of the youngest borrower, current interest rate, mortgage insurance premium, and the home’s value at appraisal.
Additionally, only certain types of residences qualify for a reverse mortgage. These include single-family homes and two to four unit homes where the borrower occupies one of the units. For condominiums, the U.S. Department of Housing and Urban Development requires preapproval. In addition, manufactured homes must also have FHA preapproval. The borrower must also obtain a certificate of occupancy for any new construction.
A reverse mortgage is a great way for seniors to get a second home closer to family. As with a traditional HECM, there are no monthly payments due. A single, balloon payment, is due at the sale of the home, when the last borrower moves out or passes away. This payment is a total of the principle plus interest. If the home sells for more than this amount, the borrower, heirs, or the estate retains the remaining equity. Should the home appraise and sell for less than the amount owed, there is a guarantee of no personal liability. Lenders are insured against this type of loss in Myersville Maryland 21773.
Surrounding Areas In Maryland
Video: Mortgages in Myersville MD
It pays to shop around for mortgage rates in Myersville, MD. Get free mortgage quotes from multiple lenders to find a competitive rate for your home loan.
Find 100 listings related to Mortgages in Myersville on YP.com. See reviews, photos, directions, phone numbers and more for the best Mortgages in Myersville, MD.
Current mortgage rates and quotes from multiple lenders in Myersville, MD
Compare mortgage rates in Myersville, MD to find the best mortgage rate for your financing needs. Home loan interest rates in Myersville, MD for new homes ...
Compare Myersville, MD Mortgage Rates and Home Loans. Enter your home loan details to get personalized quotes with current mortgage rates in Myersville, MD.
Seach and compare mortgage rates and refinance rates in Myersville, MD. MonitorBankRates.com has a list of Myersville, MD mortgage rates and mortgage refinance
Search for mortgages in Myersville, MD. Get addresses, phone numbers, driving directions, reviews and ratings on Local.com
Mortgages and home loans in Myersville MD. Find a mortgage, find a home loan or refinance a current loan with mortgage lenders in Myersville MD.
Contact information for Millennium Financial Group, Middletown Valley Bank, Columbia Bank Atm, Bb&t, and more in Myersville, MD.
Homes.com Myersville, MD Real Estate: Search houses for sale and MLS listings in Myersville, Maryland. Local information: 57 homes for sale, 0 condos, 0 foreclosure ...